Null alleles of the gene encoding NEMO (NF-kappaB essential modulator) are lethal in hemizygous mice and men, whereas hypomorphic alleles typically cause a syndrome of immune deficiency and ectodermal dysplasia. Here we describe an allele of Ikbkg in mice that impaired Toll-like receptor signaling, lymph node formation, development of memory and regulatory T cells, and Ig production, but did not cause ectodermal dysplasia. Degradation of IkappaB alpha, which is considered a primary requirement for NEMO-mediated immune signaling, occurred normally in response to Toll-like receptor stimulation, yet ERK phosphorylation and NF-kappaB p65 nuclear translocation were severely impaired. This selective loss of function highlights the immunological importance of NEMO-regulated pathways beyond IkappaB alpha degradation, and offers a biochemical explanation for rare immune deficiencies in man.